Builder confidence slips in January

Posted Date: 1/16/2014

[Washington, D.C.] According to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), builder confidence in the market for newly built, single-family homes fell one point to 56 in January from a revised December reading of 57.

"Following an unexpected jump last month, builder confidence has essentially leveled out and is holding at a solid level," said NAHB chairman Rick Judson. "Many markets continue to improve and this bodes well for future home sales."

All three HMI components declined in January. The index gauging current sales conditions edged one point lower to 62, while the index gauging expectations for future sales fell two points to 60. The index gauging traffic of prospective buyers fell three points to 40.

"Rising home prices, historically low mortgage rates and significant pent-up demand will drive a continuing, gradual recovery in the year ahead," said David Crowe, NAHB chief economist. "However, the pace of the recovery could be stronger were it not for rising construction costs and inaccurate appraisals that are keeping some home sales from going through."